Category Archives: Illumination

So you think you know KPI, TCO, and SRM? Find Out!

You might think you’ve mastered KPIs, TCO, and SRM and that you’re ahead of these trends, but here at SI, we beg to differ. But even if you have a good grasp of these capabilities, and know where the trends are taking them, these are just three of the ten trends your organization needs to be ahead of if it wants to get ahead of the game, and the competition, in 2015.

So even if you think you know what the KPI, TCO, and SRM trends are, that’s only three of the ten trends that you need to be aware of. Moreover, these are the most mature and the least forward-thinking of the current trends, so mastering these is not going to give you or your organization much of an advantage or an advantage it is going to hold for long.

Especially when current KPI definitions are anti-productive, most companies are confusing Total Cost of Acquisition and Production and distribution with Total Cost of Ownership, and Supplier Relationship Management with Supplier Browbeating. Your organization also has to stop calling top n spend reports spend analytics, understand the true cost of outsourcing, and what supply chain finance really is. So, if you’d like to understand what meaningful KPIs really are, what TCO really is, what SRM should be used for, where analysis needs to go, how to value outsourcing, what supply chain finance really is, and five other topics that you should be mastering to get ahead of forthcoming Supply Management trends, then download Sourcing Innovation’s new white-paper on Top Ten Trends for Supply Management Value Generation in 2015 (registration required).

You may have brought your costs under control in 2013 (with SI’s 2013 Top Ten) and put a proper Supply Management technology infrastructure in place in 2014 (with SI’s 2014 Top Ten), but that doesn’t mean you’ve prepared for what comes next. If you’d like a little help, download Sourcing Innovation’s Top Ten Trends for Supply Management Value Generation in 2015 (registration required), sponsored by BravoSolution, and find out how to get ahead of the trends.

You Need Trade Visibility

A trade visibility solution is a key component of a supply chain visibility platform that allows a company to track its products from the time they leave a supplier’s warehouse until the time they reach the end customer. Trade visibility is important for a number of reasons:

  • It helps you understand the factors that impact costs, cycle times, and service levels,
  • It helps you identify minor issues before they turn into major problems,
  • It helps you enforce compliance, and, most importantly,
  • It keeps you from flushing millions of dollars down the drain.

An average multi-national needlessly spends millions of dollars a year that it doesn’t have to as part of it’s global sourcing operation. Millions that could be identified, and saved, if the company implemented a good end-to-end trade visibility solution — which, today, would cost that same company well under a million dollars a year due to the low license costs of the new SaaS offerings on the marketplace, their quick set-up times, and the fact that additional personnel do not have to be hired to maintain them.

How much can you save? It depends on how much you are spending, and how bad your processes are, but consider the following:

  • A Global Data Mining study across 5 companies with between 3 Billion and 31 Billion in revenue found over 150 Million in potential duty savings alone just through better classification.
  • Prior to using the Integration Point Denied Trade Screening Solution, Eastern employees used to spend 15 to 25 minutes per shipment in an error-prone manual process. Now they can screen shipments in under a minute. That’s a process savings of almost 96%, and a savings of several hundred thousand dollars per year in needless labor.
  • Most companies spend hundreds of dollars in manual filing costs per shipment which can be processed for pennies by global trade management solutions. That’s hundreds of thousands of dollars of savings per year for your average multi-national.
  • Most trade cycles are at least 65% longer than they need to be. Since each day “in transit” has a cost that is roughly 0.5% of the total value of the goods, and since global trade visibility can shave up to 10 days off of the cycle for your average multi-national, that’s an average savings potential of 5%, or 5 Million on a 100 Million shipment.

And that’s just the tip of the ice-berg. Non-compliance costs can add up even faster.

  • Recent amendments to the IEEPA increased the increased the civil penalty for a “person to violate, attempt to violate, or cause a[n export] violation” to “an amount not to exceed the greater of (1) $250,000; or (2) an amount that is twice the amount of the transaction that is the basis of the violation.” This means that a 10 Million dollar shipment found in violation can result in a 20 Million dollar fine.
  • Violations of the FCPA, whether or not they are intentional, can also cost you millions of dollars.
  • U.S. Customs has historically collected $7 for every $1 spent conducting an audit when prior disclosures, underpaid duties, liquidated damages, and penalties are summed up.

And that’s not all.

For a full, in-depth discussion of Why You Need Trade Visibility, check out the latest Sourcing Innovation Illumination, sponsored by Integration Point. I thoroughly believe it’s worth a few minutes of your time.

Introducing B2B 3.0 and Simplicity for All

Sourcing Innovation is proud to announce the release of the first white paper in a 5-part series about B2B 3.0 — the next generation of technology for the enterprise and the first generation of technology that actually puts business users on the same footing as consumers, who have had “3.0” technologies at their fingertips for years.

This very special Illumination series is going to describe the B2B 3.0 revolution and the benefits it delivers to today’s enterprise. Considering that B2B 3.0 is the first technology to enable true commerce in the global marketplace, the doctor‘s goal with this series is to open your mind as to what B2B 3.0 is all about (hint: it’s not “Web 2.0” and all the useless hullabaloo that accompanies it) and how B2B 3.0 technologies can help you save time, save money, and increase productivity and innovation in your enterprise.

But first, it’s going to tell the tale of how we got to where we are today, which starts with B2C 1.0 in the early nineties, following the introduction of the Netscape Web Browser soon after Tim Berners-Lee released his new standard for open document sharing on the internet – HTML (Hyper Text Markup Language) 1.0. Once Netscape made the web accessible to all, enterprising entrepreneurs saw the potential of the Internet to grow new and existing businesses, and B2C e-Commerce 1.0 was born. This led to the introduction of B2B 1.0 which allowed business to use the public Internet to conduct e-Commerce, instead of EDI (Electronic Data Interchange) over private networks which were extremely costly to maintain and limited to only the largest suppliers in a buyer’s supply base.

Technology improved, online security tightened, and online storefronts moved from the static order forms of B2C 1.0 to the dynamic order forms of B2C 2.0. Online e-Commerce thrived and online retail became a trillion dollar industry. And businesses saw the potential to move beyond the transaction and take advantage of basic services such as catalog management, request for bid, reverse auctions, and supplier directories. This was significantly better than B2B 1.0, but it had its drawbacks, since the space was dominated by marketplaces and private supplier networks that restricted a buyer to those suppliers who could afford to be part of the community (as there were significant membership fees, and no supplier could afford to be part of all the marketplaces). Furthermore, content staled quickly as suppliers had to maintain different versions of their catalog for each network they belonged to, and each buyer they did business with.

A revolution was needed. So thought leaders again looked to the consumer space and B2C 3.0 which was taking advantage of integrated search across sites and document formats, mash-ups, web services, networks, and other services that significantly enhanced e-Commerce for the average consumer. As a result, visionary software and service providers in the B2B space started building their own web-services, intelligent agents, forums, knowledge-networks, mash-ups, and meta-search technologies. Now, business buyers can search across “catalogues” and “punch-outs” just as easily as a consumer can use Google Product Search (formerly Froogle), normalize data from hundreds of file-formats into a single common meta format to allow for intra-and-inter-enteprise collaboration in design-for-sourcing, and access third party services during the negotiation of a transaction.

And it’s just the beginning. So check out the Illumination that is Introducing B2B 3.0 And Simplicity for All and find out not only what B2B 3.0 is all about, but how we got here, and why we need it. Simply put, it is the first technology to enable true B2B e-Commerce — consisting of simple, fast, low-cost transactions at true market prices — and the technology that will run tomorrow’s businesses.